News & Articles

Local experts combine for key AML training session: Includes updates to Cayman’s anti-money laundering framework over past 12 months

November 6, 2020
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Two of the country’s best-known experts on the Cayman Islands’ anti-money laundering framework have united to offer a refresher training session for the local compliance and risk management industry, Thursday, 25th November, 9am to 12:30pm.

Ms Angele Mele, Founder of RiskPass AML+Compliance Ltd. and Mr Paul Byles, Director of FTS, are former regulators of the Cayman Islands Monetary Authority (CIMA) and have worked in the compliance and risk management sector for the past 15 years. This key training session offers the rare opportunity for attendees to learn from both speakers on the various changes to the country’s anti-money laundering regime.

“The purpose of the session is not only to provide an overview of recent legislative and regulatory updates but also to identify the changes that local compliance experts and directors need to incorporate into their existing systems, to be compliant,” Paul Byles, Director of FTS and organiser of the seminar said.  

Ms Mele will present on the topics of ‘Proliferation Financing’ and ‘Extensions to the Risk-based Approach,’ while Mr Byles will address ‘Targeted Financial Sanctions’ and ‘Transaction Monitoring.’ The seminar will be held on the Zoom platform and will include two breakout sessions and an online test. Attendees will receive a certificate of completion.

“We thought it would be timely to hold a session focusing on material updates since late 2019 and outline how these changes can be added into an existing framework,” Ms Mele said.

Mr Byles said that while some local professionals will be aware of the changes, it’s not always the case that they have incorporated necessary updates into their existing systems and procedures.

“Being aware of the changes and getting to the stage where you have fully incorporated them are two very different things,” he said. “The approach taken with this training session is to pinpoint the areas where changes need to be made and explore how these changes can be incorporated. I am hoping this is where we will be able to add value for compliance professionals.”

The session will be carried out via Zoom on Thursday, November 25th, from 9am to 12:30pm. Persons can sign up at www.ftscayman.com./events.

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AML Steering Group highlights significant progress to date

November 3, 2020
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As the Observation Period by the Financial Action Task Force (FATF) came to a close on October 23rd, Cayman’s Anti Money Laundering Steering Group (AMLSG) highlighted 10 key milestones which the Cayman Islands has achieved to date. Key highlights include:

  • An updated National AML/CFT Strategy 2019-2022, which was published in September 2019.
  • Targeted AML/CFT risk assessments conducted in 2019 and 2020 which covered; terrorist financing, SIBL Excluded Persons (EPs), the Special Economic Zone, NPOs and the International Financial Centre.
  • Officially forming the Cayman Islands Bureau of Financial Investigations (part of the Royal Cayman Islands Police Service).
  • Creation of a new subscription service by the FRA which allows the receipt of sanction notices when they have been issued. 
  • Official AML/CFT supervision of SIBL EPs by CIMA bringing those entities fully into the local AML framework as well as a new division within CIMA focused on AML/CFT supervision.
  • Enhancing the supervision of Designated Non-Financial Businesses and Professionals (DNFBPs) including attorneys, accountants and realtors, through additional guidance, sector outreach, risk assessments and onsite inspections.
  • Since October 2019, company directors’ names (including alternate directors) and managing members of limited liability companies (LLC) have been publicly available from the Registrar of Companies. Since October 2020, further information including authorised share capital is also publicly available. Legislation was also updated regarding legal arrangements, formalising a trustee’s AML/CFT/CPF responsibilities and allowing government agencies, law enforcement and competent authorities the mechanism to request information from a trustee.
  • A strategic analysis carried out by the FRA which improved Cayman’s understanding of the risk it faces.

A release from the AMLSG explained that the Cayman Islands is now moving into the next phase of the process, where the FATF will determine whether sufficient progress has been made and the final outcome on that regard will likely be determined in February 2021.
FTS Director Paul Byles says some of the feedback suggesting some of the measures taken have gone too far is reasonable but that the issue is also partly about reputation management which remains important.

“A lot of resources have been deployed by both the private sector and the government to ensure that the jurisdiction meets these standards. And the industry is correct to point to this as a significant burden. But in the end its also important to recognise that these initiatives have a direct impact on the reputation of the jurisdiction and that local financial services providers are negatively impacted if the jurisdiction ends up on the wrong side of any global assessments,” says Byles.

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Cayman Islands Government Welcomes EU Listing Decision

October 6, 2020
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The Cayman Islands Government welcomes the EU’s decision to remove Cayman from its list of non-cooperative jurisdictions for tax purposes.

Cayman’s Premier, the Hon. Alden McLaughlin, said the February 2020 listing was in relation to investment funds supervision.

“Cayman responded positively by expanding the scope of our funds regime to ensure that the Cayman Islands Monetary Authority, our financial services regulator, has the legal mandate to supervise all Cayman-based investment funds,” he said.

Premier McLaughlin reaffirmed that Cayman remains fully committed to international tax good governance standards, and noted that the EU has joined the OECD in positively recognising Cayman’s tax regime.

In July 2019, the OECD’s Forum on Harmful Tax Practices assessed Cayman’s regime as “not harmful,” the highest-ranking possible.

“We will continue collaborating with the EU, including through broadening our dialogue to topics of mutual interest,” Premier McLaughlin said. “These include green financing and key topics outside of financial services, such as environmental matters and tourism.”

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EU to put Cayman on tax blacklist next week

February 12, 2020
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The European Union is set to place the Cayman Islands on its list of uncooperative countries in tax matters at a European Council session next week. The move comes less than a month after the UK has exited the EU.

According to diplomats, cited by the Financial Times, EU27 ambassadors on Wednesday took a decision to place the Cayman Islands on a list of nine territories that do not effectively cooperate with the European bloc. European finance ministers are set to confirm the decision at a meeting on Tuesday, 18 Feb.

In order to avoid inclusion on the tax blacklist, the Cayman Islands government had agreed last year to address EU concerns over the economic substance of collective investment vehicles before the end of 2019.

The Legislative Assembly passed amendments to the Mutual Funds Law and a new Private Funds Law reforming the registration, administration and supervision of funds at the end of January 2020. Whether the delay in passing the legislation has caused the move is not clear.

According to unnamed officials quoted by the Financial Times, the Cayman Islands “did not pass legislation that adequately addressed concerns about companies who claim tax advantages but do not have a sufficient economic presence on the island”.

An EU official said the Cayman law was found to be “deficient”.

Given that EU finance ministers are expected to make the final decision next week, the Cayman Islands government said it has not received official confirmation of a blacklisting.

In a statement issued on Wednesday, the government said, “We believe that we have introduced the appropriate legislative changes to enhance our regulatory framework, in line with the EU’s requests.

“Over the past two years, the Cayman Islands Government has adopted a number of fundamental legislative changes to enhance tax transparency and cooperation with the EU, fully delivering on our commitment to strengthen our regulatory regime and addressing the concerns reflected in the EU Council conclusions of 12 March 2019. The Cayman Islands Government has offered to make itself available for further dialogue or clarification with the Commission and the EU Ministers of Finance,” the statement said.

The EU is targeting Cayman and two other British Overseas Territories – Bermuda and the British Virgin Islands – as well as the Bahamas for enabling structures that attract profits without having corresponding economic activity locally.

In response, all four territories introduced domestic legislation that requires certain companies, which want to take advantage of the zero- or low-tax regimes in these jurisdictions, to demonstrate they have a sufficient level of management, staff, offices or expenditures in the territories.

Cayman adopted the International Tax Cooperation (Economic Substance) Law in December 2018. In March 2019, the EU Council said Cayman, the Bahamas and the British Virgin Islands committed to addressing the concerns relating to economic substance in the area of collective investment funds. While the three jurisdictions had engaged in a positive dialogue with the EU Code of Conduct Group on Business Taxation and have remained cooperative, the EU Council said at the time, they will “require further technical guidance” and “were granted until end [of] 2019 to adapt their legislation”.

Bermuda was briefly blacklisted and then removed from the list last year after the territory passed additional amendments to its Economic Substance Regulation and thereby resolved an issue highlighted by the EU regarding the wording of core income-generating activities for intellectual property assets.

Paul Byles, director of consulting firm FTS, said the Cayman Islands had done “an extraordinary job” in the area of addressing concerns and perceptions in relation to its anti-money laundering and counter-terrorism financing regime.

“This blacklisting relates more to tax-competition issues which are susceptible to more discretion by overseas bodies and commercial politics between countries,” Byles said.

He added, “Without reading the analysis that led to the EU blacklisting, it is hard to comment on the tax issues, but it is surprising that Cayman would be blacklisted given the amount of effort and resources we have invested into that area as well.

“If we consider the extent of cross-border cooperation that has been in place for decades, plus the recent legislation on economic substance, as well as beneficial ownership, it is hard to conclude that we belong on such a list.”

The current list of countries that are deemed uncooperative in tax matters exempts EU members. Since the first EU blacklist was published in December 2017, it has been revised 10 times.

Only eight countries are currently blacklisted. Most of them have virtually no financial relations with the EU. They are American Samoa, Fiji, Guam, Oman, Samoa, Trinidad and Tobago, the US Virgin Islands and Vanuatu.

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Cayman Enterprise City invests big in Cayman’s tech future

January 21, 2020
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Cayman Enterprise City (CEC), through its technology-focused special economic zone, Cayman Tech City, has announced a five-year founding sponsorship commitment to the Digital Cayman not-for-profit initiative valued at $250,000.

Digital Cayman was first announced at the Cayman Islands Digital Economy Conference (CYDEC) on June 20, 2019, following a meeting with government representatives and industry professionals held during CYDEC 2018. The initiative emerged due to a growing demand by the Cayman Islands digital sector for a professional body to represent digital industries and support the Cayman Islands Government with relevant policy and legislation development.

“Our five-year commitment and sponsorship of the Digital Cayman initiative has enabled its recent launch and will ensure the initiative’s longevity,” said CEC’s Chief Executive Officer and Digital Cayman executive board member, Charlie Kirkconnell.

“The CEC mission is to help diversify Cayman’s economy and develop a business community where innovation thrives, so supporting Digital Cayman aligns seamlessly with our goals. We’re excited to help drive this project forward and to further positively impact the Cayman Islands community.”

The industry body was initially conceived by Paul Byles, Digital Cayman executive board member, founder of the CYDEC conference, and director at FTS, and is now being actively facilitated by a steering committee of 15 prominent technology professionals and industry leaders.

“We’re on a mission to strengthen Cayman’s digital sector by advocating for positive policy changes that will encourage the growth of the digital sector while adhering to appropriate standards for risk and reputational management purposes,” explained Byles.

As the voice of the Cayman Islands’ digital sector, cultivating Cayman’s dynamic and innovative digital ecosystem is at the forefront of the Digital Cayman mission. Since its launch, and together with Cayman Tech City, the initiative has already hosted seven public ‘Tech Talks’ events which have welcomed over 225 industry professionals to discuss tech trends.

Topics discussed and actively debated include Facebook’s Libra cryptocurrency, building tech ecosystems, IT security systems, product development cycles, smart contracts, data protection, and most recently sector advocacy. Digital Cayman plans to officially welcome members into the association later this year.

Chris Wall, Digital Cayman executive board member, explained that to achieve the goals set out by the Digital Cayman initiative, they will actively engage and work with government and regulators in Cayman and across the world to ensure that the Cayman Islands and its people aren’t left behind.

“The digital sector is moving at an absolute rapid pace,” he explained during a recent Radio Cayman interview. “There’s no reason for the Cayman Islands to lag behind. Through Cayman’s growing tech community and through the Digital Cayman initiative, we can be at the absolute forefront of innovation, digital development, and ultimately positive progress.”

To date, CEC has contributed over USD$39,000 in capital for financial support and services to establish the Digital Cayman initiative. This initial expenditure covered everything from legal to brand development and design to marketing services for the launch of the initiative.

CEC’s five-year founding partner sponsorship of Digital Cayman is an annual commitment of USD$50,000 – totalling USD$250,000 over the five-year period.

As part of the commitment, CEC is also providing Digital Cayman with the opportunity to participate in the CEC’s Enterprise Cayman outreach initiatives, which includes internships and school programmes, and will enable the non-profit organisation to provide industry knowledge and expertise directly to Cayman’s youth, up-and-coming digital professionals, and entrepreneurs.

“The attributes that have made the Cayman Islands so enticing to the financial services sector have also attracted some of the world’s top technology entrepreneurs and leading fintech, media, and blockchain businesses to set up a genuine physical presence in the jurisdiction,” said Kirkconnell.

“While CEC is now home to a vibrant community of over 250 global special economic zone companies, 170 of which operate from within Cayman Tech City, Digital Cayman membership is not restricted to the special economic zones; it is open to everyone working in the digital sector who is interested in helping to develop a dynamic technology ecosystem in the Cayman Islands.”

For more information about the Digital Cayman initiative and to register your interest, visit www.digitalcayman.com.

‘Tech Talks’ take place on the second Thursday of each month and members of the public who are working within the Cayman Islands’ technology sector are invited to register their interest by emailing innovate@caymanenterprisecity.com.

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Cayman Islands: CyDEC explores latest trends and the future landscape of the digital economy

June 27, 2019
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The 2nd annual Cayman Islands Digital Economy Conference recently welcomed over a hundred delegates to the Kimpton Seafire Resort & Spa to discuss fintech, blockchain, cryptocurrency, digitization of education, ICO’s and what it all means for the future of Cayman’s digital economy.

Acting Premier Hon. Moses Kirkconnell opened the conference saying Cayman is the jurisdiction of choice for financial services, fintech and digital services and highlighted how the Cayman Islands government is working to keep up with the evolving technology.

Minister of Financial Services, Hon. Tara Rivers touched on the importance of the digital economy to the Cayman Islands and how the Ministry is working to strengthen the jurisdiction in a manner consistent with our reputation as a global leader in financial services.

A day after the announcement of Facebook’s own digital currency, Libra, Justin Fisher, CEO and Co-Founder of VeriBlock gave a fascinating presentation on the pros and cons of this system and how this will allow billions of users to make financial transactions across the globe in a move that could change the worlds banking system.

With the dramatic highs and lows of the cryptocurrency landscape in recent years, Nolan Bauerle, writer and researcher at CoinDesk delved into the current cryptocurrency climate and discussed how far the digital economy has come, finishing on a discussion around AI and how it will impact our lives. 

As the integration of digital technology becomes apparent in our everyday lives, Kwaku Aning, Director at Center for Innovation and Entrepreneurial Thinking discussed how the digitisation of education practices can both improve and hinder our children’s way of learning as we move from ‘old school’ to ‘new school’ systems.

ICO’s remain an opportunity for international financial centres, such as the Cayman Islands according to Ravi Bahadursingh, Barrister at Chancery Lane Chambers, who explored how these risks can be manged and where this structure is headed in the future.

Expert panels featuring international and local experts focused on how regulators should manage the risks associated with fintech and what the future of the digital economy might look like and how our lives are being ‘disrupted’.

The conference also brought together students from local schools that recently competed in the Dart Minds Inspired “Rover Ruckus” challenge to discuss the importance of this programme in Cayman and demonstrate their fascinating robotic creations.

Conference organiser and Director of FTS, Paul Byles, said, “The speakers for this year’s conference truly captured what the digital economy signifies and how these developments will impact our way of life and the way we do business in the Cayman Islands.” 

Thanks to the support of conference sponsor, Cayman Tech City, ten young students were invited to to attend the conference who had expressed an interest in technology through the CEC “Summer in the City” internship programme.

“With an eye to the future, Cayman Enterprise City is inspiring the next generation to pursue technology-driven careers by connecting students with the experts, supporting forward-looking programs like CyDEC and providing engaging learning opportunities within Cayman’s special economic zones,” explained Kaitlyn Elphinstone, VP Marketing Cayman Enterprise City.

“The second annual Cayman Islands Digital Economy Conference was once again a huge success and I am grateful to the speakers, sponsors and delegates who attended without which this conference would not be possible,” said Mr Byles.

CyDEC would like to thank its sponsors Ministry of Financial Services, Ministry of Commerce, Planning & Infrastructure, Tower, EQI, Ministry of Commerce, Cayman Tech City, Veriblock, Health City, Cayman Islands Chamber of Commerce, Ministry of District Administration, Tourism & Transport, Digital Cayman, Deloitte, Pinnacle Media and Hurley’s Media.

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Digital Cayman to advocate for the tech industry

June 26, 2019
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A new digital sector industry body, called Digital Cayman, was launched last week with the aim of developing and growing Cayman’s digital economy.

The establishment of the non-profit organisation was announced at the Cayman Islands Digital Economy Conference (CyDEC) on 20 June.

“The digital economy is growing rapidly, and the digital revolution is well and truly under way on a global scale,” said Digital Cayman executive board member Chris Wall, owner of Walzzy Creative SEZC, and co-founder of Grappzie, a UK-based digital first marketplace for personalised creativity.

“As an industry-led, not-for-profit organisation, Digital Cayman aims to cultivate Cayman’s dynamic and innovative digital ecosystem to ensure that the Cayman Islands adopts and adapts to this ever-changing environment,” he said.

The idea for an organisation to support the government in the development of industry-specific policy and legislation was developed at the 2018 CyDEC conference during a meeting of industry professionals and government representatives.

Paul Byles, Digital Cayman executive board member, founder of the CyDEC conference, and director at management consulting company FTS, said, “We’re on a mission to strengthen Cayman’s digital sector by advocating for positive policy changes that will encourage the growth of the digital sector while adhering to appropriate standards for risk and reputational management purposes.”

Minister of Financial Services Tara Rivers said at this year’s CyDEC event, “We look forward to engaging with Digital Cayman as we explore new regulatory needs and legislation to ensure that the Cayman Islands remains at the forefront of innovation, and compliant with International standards.”

Digital Cayman is currently facilitated by a steering committee of 15 technology professionals and industry leaders, and is supported by Cayman’s special economic zone Cayman Enterprise City.

John Edge, Digital Cayman committee member and Connection Science Fellow at Massachusetts Institute of Technology, said that the growing number of opportunities for the Cayman Islands is significant. “Digital Cayman is a much-needed industry group which will coordinate and champion opportunities to make certain that the Cayman Islands plays a meaningful global role in the data economy through its proven trust and fiduciary services,” he said.

CyDEC conference

The second annual Cayman Islands Digital Economy Conference at the Kimpton Seafire Resort + Spa discussed fintech, blockchain, cryptocurrency and digitisation topics, and their implications for the future of Cayman economy.

A day after the announcement of Facebook’s own digital currency, Libra, Justin Fisher, CEO and co-founder of VeriBlock, presented the pros and cons of this system and how it will allow billions of users to make financial transactions across the globe in a move that could change the world’s banking system.

With the dramatic highs and lows of the cryptocurrency landscape in recent years, Nolan Bauerle, writer and researcher at CoinDesk delved into the current cryptocurrency climate and discussed how far the digital economy has come, finishing on a discussion around artificial intelligence and how it will impact our lives.

As the integration of digital technology becomes apparent in our everyday lives, Kwaku Aning, director at the Center for Innovation and Entrepreneurial Thinking, discussed how the digitisation of education practices can both improve and hinder our children’s way of learning as we move from ‘old school’ to ‘new school’ systems.

Initial coin offerings, or ICOs, remain an opportunity for international financial centres, such as the Cayman Islands, according to Ravi Bahadursingh, barrister at Chancery Lane Chambers, who explored how these risks can be managed and where this structure is headed in the future.

Expert panels featuring international and local experts focussed on how regulators should manage the risks associated with fintech and what the future of the digital economy might look like and how our lives are being ‘disrupted’.

The conference also brought together students from local schools that recently competed in the Dart Minds Inspired ‘Rover Ruckus’ challenge, to discuss the importance of this programme in Cayman and demonstrate their fascinating robotic creations.

Conference organiser Paul Byles said, “The speakers for this year’s conference truly captured what the digital economy signifies and how these developments will impact our way of life and the way we do business in the Cayman Islands.”

Conference sponsor Cayman Tech City invited 10 students to attend the conference who had expressed an interest in technology through the CEC ‘Summer in the City’ internship programme.

“With an eye to the future, Cayman Enterprise City is inspiring the next generation to pursue technology-driven careers by connecting students with the experts, supporting forward-looking programs like CyDEC and providing engaging learning opportunities within Cayman’s special economic zones,” said Kaitlyn Elphinstone, VP Marketing, Cayman Enterprise City.

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Conference to address blockchain and digital economy

June 16, 2019
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Local and international experts will discuss developments in the digital economy and their implications for the finance, technology and legal industries, as well as the public sector, at the Cayman Islands Digital Economy Conference on Thursday, 20 June, at the Kimpton Seafire Resort.

“With the success of the first event last year, we are thrilled to be able to bring this event back to the local business community,” Paul Byles, director of consulting firm FTS, said.

“It is important for Cayman, as a global financial centre, to remain abreast of the latest trends within the digital economy, not only so that we may serve our clients better but also so we can ensure our regulations stay up-to-date,” he added.

This year’s line-up of speakers will showcase global trends, groundbreaking ideas and technological advancements.

Following welcome remarks from Premier Alden McLaughlin, the minister of Financial Services and Home Affairs Tara Rivers will be giving an opening address.

“Fintech is an ever-growing sector within Cayman’s largest industry,” Minister Rivers said. “As a jurisdiction, we are actively working on ways to create the appropriate regulatory environment to ensure that this new technology is properly assessed and implemented in a manner consistent with our reputation as a global leader in financial services.”

Co-founder and CEO of VeriBlock, Justin Fisher, will discuss some of the world’s most fascinating innovations involving blockchain technology during the first presentation of the morning. Nolan Bauerle, writer and researcher at CoinDesk, will explore the successes and failures of cryptocurrencies and Ravi Bahadursingh, barrister at Chancery Lane Chambers, will look at the implications of digital advances for initial coin offerings.

“As the digital economy is anything but one dimension, it is important that we explore the multiple sectors that make up the digital economy so that our attendees can receive a more rounded view of the current state and future developments,” Byles said in a press release.

The conference will also include what organisers called “a fireside chat” on how local regulators are approaching the risks associated with fintech and a panel titled ‘Technology and us’ as well as a display of local, young talent in Cayman’s robotics arena.

The Cayman Islands Digital Economy Conference, known as CyDEC, is organised by FTS and sponsored by the Ministry of Financial Services, the Ministry of Commerce, Planning and Infrastructure, Tower Marketing, Cayman Tech City, Veriblock, the Ministry of District Administration, Tourism and Transport, the Cayman Islands Chamber of Commerce and Pinnacle Media, among others.

Tickets are $350 and include entry to the full-day conference, breakfast, lunch and a cocktail reception. Visit www.cydec.ky for more details.

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CyDEC returns in 2019

May 31, 2019
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The Cayman Islands Digital Economy Conference (CyDEC) will return to the Aurea Ballroom at Kimpton Seafire Resort and Spa on Thursday, June 20th, bring together local and international experts to discuss developments within the digital economy and their applications for leaders across the financial, technological, legal and public sector industries.

To register for CyDEC 2019, click here.

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AML risk meets SIBL entities

October 9, 2018
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If you are licensed under the Securities and Investment Bill (SIBL) in the Cayman Islands, or you are registered as an Excluded Person under SIBL, you can be forgiven for either thinking that much of the anti-money laundering framework doesn’t seem to apply to your business, or being confused about what you need to do to ensure you are fully compliant.

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